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OTTAWA - Stephen Harper says Vladimir Putin is out of touch with ordinary Russians and his head is cluttered with Cold War memories.

The prime minister was in Munich on Wednesday to snipe at the Russian president for annexing Crimea in the face international condemnation for what has been called an illegal land grab on the Black Sea.

"It's increasingly apparent to me that the Cold War has never left Vladimir Putin's mind. I think he still thinks in these terms," Harper told a business audience.

"And I think underlying his invasion of Crimea and his threats to Ukraine really is unfortunately that kind of thinking."

Harper doesn't believe the Russian people are on the same page and reminisced about his travels to the country where he said he gained a better understanding of the mindset, especially among younger Russians.

"They want the same living standards ... the same standards of governance and democracy and rights and information flow that the rest of us have."

He warned that if Russia doesn't change course, Europe is in danger.

"We simply as a world cannot afford the risk of Europe going back to being a continent where people seize territory ... where the bigger military powers are prepared to invade their neighbors or carve off pieces," he said. "I know the feeling about that in Germany particularly."

Harper said he would push for severe economic sanctions even if they risk harming the Canadian economy.

He acknowledged Europe's dependency on Russian energy and the reluctance of some countries to heed calls for harsher measures.

"But it's a double-edge sword. Obviously Europe is extremely dependent on the energy supplies. On the other hand, Russia is extremely dependent on the energy revenue and for all intents and purposes, it's a one-dimensional economy in that regard."

Harper has been pounding his message against Russia since he took off for Europe last Friday, including a stop in the Ukrainian capital to lend support to the interim government in Kiev.

Other stops included The Hague, where G7 leaders met on the sidelines to discuss further sanctions if Russia's military moves beyond Crimea into eastern Ukraine.

He landed in Berlin later Wednesday for a meeting Thursday with German Chancellor Angela Merkel, who appears softening towards getting tougher with the Kremlin.

Harper said it's too early to identify which segments of Russia's economy could be targeted the hardest, but most believe the energy and financial sectors would inflict the most pain on Putin's regime

"We're all in a fragile global economy," he said in Munich.

"Some of our economies individually are fragile," he said of the sluggish economies of some European countries still recovering from the 2008-09 global meltdown.

"So we are going to be sensible about this. We're going to look at ways we can apply pressure that will be felt in Moscow."

He said whatever is decided would take into account the impact on Canada's economy.